Auctions delivering
Market conditions of low supply, hot demand favour sellers
AUCTIONS are set to ramp up on the Gold Coast as the short-supply, high-demand market conditions favour selling under the hammer.
While auction is the predominant method of sale in much of the rest of the country, Queensland has been slower in embracing the method, preferring to stick to private treaty.
But times are changing, according to agents, who report having one of the biggest and most successful summer auction seasons on record.
Hundreds of millions of dollars changed hands in the past month and clearance rates have been climbing steadily since pre-Christmas, at times surpassing 85 per cent, according to data from REA Group.
Those properties that didn’t sell on the day either sold before auction or deals were brokered in the days after, yet still on auction terms.
Andrew Bell, principal of Ray White Surfers Paradise, said January was one of the most extraordinary months for auctions throughout the country, but particularly on the Gold Coast because of the influx of southern buyers.
Mr Bell said the market conditions of low supply and high demand were perfect for those looking to sell.
“I would never have any hesitation to say that auction is the best way to sell in any market, but we are seeing clear evidence of the success under the current conditions,” he said.
As part of its annual The Event, Ray White Surfers Paradise put a record number of properties under the hammer and attracted some big sales, including $7.23m paid for one of the last remaining original shacks on the beachfront in Main Beach and $4.2m for a four-storey architectural stunner on Katta Ave in Currumbin.
Mr Bell said the high levels of inquiries they were receiving and tight vacancy rates meant there was a massive pool of potential buyers still in the market just waiting to find something to buy.
“This is going to continue to support the Gold Coast market for the rest of this year and into the next,” he said.
Historically, prestige property agency Kollosche has held back from taking properties to auction because the pool of potential buyers for very top-end listings is not big enough to create a competitive environment, according to principal Michael Kollosche.
But, he said, things are changing.
“While we will always do what is in the best interest of the seller, the lack of supply and huge demand at the moment has created a good environment for auctions,” he said. “We are definitely doing a lot more of them and for the ones we have done, from Burleigh Hill to Tallebudgera through to Mermaid Beach, we are getting hundreds of attendees and 15 to 25 registered bidders, and we’ve had a strong success rate.”
He revealed that in two instances, auctioned properties sold for more than $1m above the reserve.
“It doesn’t happen every time, of course, but some properties are achieving 20 to 25 per cent above reserve, which shows the strength of the market,” he said.
“It’s so unpredictable. It’s difficult to know what anything is worth at the moment until you put it out there and there is a frenzy of demand.”
COVID outbreaks prompted Amir Mian, principal of Amir Prestige, to swap the agency’s annual in-room auction event this year for a series of on site auctions.
“With the market conditions being so volatile, people felt more comfortable being outside and among fewer people. I think being present at a house also makes the potential buyers feel more connected to it,” Mr Mian said.
With clearance rates surpassing 75 per cent, he said the success of the auctions was boosted by the increased presence of serious southern buyers.
“Those who turned up at the auctions were there to buy, they weren’t looking around, they weren’t checking the market, they were there on a mission to purchase a property, and the majority of them did,” he said.
John Cole, of Lucy Cole which holds its annual Alfresco auction event, reported that while the number of auctions held this year were down because of the lower levels of stock the sales were 40 per cent higher than previous years.